Paweł Surówka, CEO of the PZU Group, speaking at a Polish-American Business Collaboration event held in New York on October 4 2018. The economic summit in the city's financial district was followed by a co-hosted event with Goldman Sachs. (Source: PZU).PZU.

While a survey conducted on the eve of an economic summit in New York hosted by leading Polish company PZU Group alongside investment bank Goldman Sachs, discovers overwhelming evidence for the majority of U.S. nationals seeing Poland as far from a top innovation nation, the view belies a country with “Unexpected Champion” potential.

Indeed, Christian Ketels, chief economist at The Boston Consulting Group (BCG), who attended the event in New York city late last week at the Harvard Club and spoke alongside PZU company representatives, underlined that: “Polish economic success is an incredible story and a story that people did not necessarily expect.” The event was attended by over 50 CEOs of the biggest Polish companies, U.S. investors and a number of Polish tech start-ups.

A member of the Harvard Business School for around 17 years, where he led the research team at Michael Porter’s Institute for Strategy and Competiveness, Ketels added: “It is very easy to forget that if you achieved success, that as you started out, it did not always look like this, it did not always look like things going to turn out this way. In fact, many other countries have not been successful.”

It is understood that a case study and report on Poland is now in preparation for the so-called “Polish transition” by Ketels and a Harvard team, which is being dubbed the “Unexpected Champion”, according to Paweł Surówka, President of the Management Board of PZU, speaking on his return from the economic summit in America.

The survey commissioned by PZU, the largest financial institution in Poland and one of the largest in the Central and Eastern Europe (CEE) region, and conducted by Harris among over 2,000 U.S. adults this September, comes one hundred years after Poland regained its independence (1919 - under Ignacy Jan Paderewski, pianist turned politician and the nation’s Prime Minister after World War One), and nearly thirty years after a major political and economic transformation in CEE.

The findings have revealed that the majority canvassed for their opinion “grossly underestimate” Poland's innovation, education levels and economy.

The highlights revealed that 89% of U.S. adults believe that Poland does not rank in the top 40 on the list of the most innovative countries, according to the 2018 Global Innovation Index, while nearly two-thirds (64%) perceive Poland's economy as being heavily based on agriculture. But the facts would indicate quite the opposite.

The fact is that in 2017 nearly 58% of the total number of employees worked in services in Poland, 31% in industry and only 11% in the agriculture sector, according to European Employment Services.

Furthermore, the Harris Poll/PZU survey showed that close to half of Americans (47%) think there are “not many job opportunities” in Poland. In fact, Poland is the only European country that has not experienced recession over the last decade and is outpacing the euro region in terms of growth.

Of course one might say a sample of around 2,000 people is not that extensive, and perhaps a larger sample might have come up different result. However, I do not think it would have been dramatically different, even if some folks had actually read about FTSE Russell’s upgrade of Poland to Developed Market status from Advanced Emerging.

In making this change, FTSE Russell, part of the London Stock Exchange Group, had assessed the country’s capital market across 20-odd different criteria and given it a clean bill of health. Their findings had shown the country to have improved and as such promoted it to the big boys club. Some have nevertheless suggested it should still be an emerging market, as highlighted in my Forbes article on the upgrade this September.

The effective upgrade was September 24 and officials from Poland came over to London - including from PZU (Powszechny Zakład Ubezpieczeń), a component of the WIG20 and first quoted on the Warsaw Stock Exchange back in May 2010 - to perform the opening bell ceremonies on the day. So, there was perhaps enough time for people to take things in between then and now.

The survey result coming out of the U.S. might come as a surprise generally - and to Europeans more especially - knowing what Poland and its country men and women have given the world over the centuries.

Take one example and sacrifice made from World War Two, where Polish pilots under the British RAF accounted for 1 in 5 fighter pilots to take to the skies during the last days of the Battle of Britain. Without that contribution it is anyone’s guess if the war would have been won.

Interviewed back in Warsaw, Surówka commenting on whether he was surprised at the survey’s findings undertaken by Harris amongst American adults aged over 18, said: “No, I was not, because that is fundamentally the image of Poland that has lasted. It is absolutely true that when Poland ‘got into the ring’, so to speak, in the 1990s for the first time in the free markets it could not really be compared by any means or any metric to say, for example, to Germany."

He added: “We had to endure years of destruction the war [World War Two] and thereafter substantial mismanagement in the Communist era. So, people had to work it up, if you like. That said, if one considers where Poland was a hundred years ago - to where it has arrived at today with the FTSE Russell upgrade to Developed Market status - it is a big milestone and we have come a long way.”

In fact, it was the first time such an upgrade has happened since Israel was promoted in a similar fashion by the index provider.

Polish Innovation

Poland has certainly earned its name as a country of innovation. Many devices and useful objects have been developed here over the centuries. Running through the lists, one finds the Kerosene lamp, which dates back to 1853 when Ignacy Łukasiewicz made it in Lwów, formerly in Poland.

Then we can cite the bulletproof vest, which was invented by Jan Szczepanik in 1901. Just a year later, it saved the life of King Alfonso XIII of Spain during an assassination attempt on his wedding day. Now, it saves lives almost every day.

Add to that the paper clip, an invention made by Józef Hofmann, a composer, who was inspired by the shape of a treble clef for this useful item.

And, the Walkie-Talkie thanks the efforts of Henryk Magnuski, who could not return to Poland after the outbreak of WW2. In the U.S. he developed the prototype of handheld receivers for the U.S. Army in 1941.

Then let us not forget the first mini-computer called the K-202, which was developed in 1970 and invented by Jacek Karpiński. We can also throw toothpaste, the invention of Esperanto, double-Nobel prize winner Marie Curie (for physics in 1903 and chemistry in 1911) into the innovation bucket as well as Renaissance-era astronomer Nicolaus Copernicus.

True Economic Picture

Other points worth noting about Poland, real GDP increased by 4.6% year-on-year in 2017, the highest result since 2011. And, it is set to expand by around 5% in 2018. The Polish economy is now said to in a sweet spot with almost full employment.

In relation to the business services sector, while 36% of Americans do not believe that business services job market is the fastest growing area of the Polish economy, this again far from the truth.

Indeed, the fact is that during the last few years, business service sector has become one of the largest employers in the country, with employment exceeding 270,000 people. According to the Association of Business Service Leaders (ABSL), a leading body representing the business services sector in Poland, the number of employees in the Polish business services sector is expected to surpass 300,000 by the start of 2019.

Furthermore, the study also found that in terms of education, 91% of Americans do not believe Poland ranks in the top five in terms of educational attainment. And, 31% believe that Poland's population is not well-educated. In actual fact, Poland ranks in the top five, based on data from the Organisation for Economic Co-operation and Development (OECD).

Add to that just over half of U.S. adults (51%) do not know believe that U.S. financial institutions are outsourcing jobs to Poland.

Again, the fact is the country with its highly-educated workforce is one of the most attractive markets in terms of outsourcing. Today in Poland there are more than 500 foreign companies with Business Process Outsourcing (BPO), Shared Services Centres and R&D hubs including U.S. financial institutions such as Citi or JPMorgan Chase and high-tech companies like Amazon, Facebook and Google.

U.S. Investment Banks' Interest & Tech Evolution

Last December, it was reported that U.S. investment bank Goldman Sachs was planning to raise its headcount in Poland by around half during 2018 through hiring an additional 25o employees in Warsaw. At the time, Goldman’s had a tad over 500 staff in its Warsaw operations hub, and overall number of staff by the end of 2018 was projected at between 750 and 800. The signalling of that development followed news just over year ago (September 2017) that banking peer JPMorgan had intentions to create around 3,000 new positions in the Polish capital.

Over the last few years Poland has undergone a technology and industry evolution with dynamic growth in high-end business services, research and development, financial technology and IT.

Surówka noted here that: “This boom has led to a tremendous economic growth, job creation and foreign investments. The Polish economy shifted toward more labor intensive and higher value-added service industries, becoming one of the leaders of global business services industry. Despite that the perception of Poland's economy among U.S. citizens is still quite different, however we are determined to change it."

During his speech last week, Polish Prime Minister MateuszMorawiecki referred and reiterated the recent upgrade of Poland by FTSE Russell, from “Advanced Emerging Market” to “Developed Market.”

He underlined that it was a “breakthrough” decision, but was not surprising since the assessment was made upon strict and tangible criteria. In fact, the index provider assessed the country across 21 criteria - including clearing and settlement. And, Morawiecki stressed that Poland has become a member of Developed Market club as a “truly social and competitive economy.”

Poland’s Prime Minister Mateusz Morawiecki addressing a Polish-American Business Collaboration event in New York City, October 4, 2018. (Source: PZU).PZU.

Sustainable Economic Development

During the event, Enrique Rueda-Sabater, Senior Advisor at BCG presented the latest Sustainable Economic Development Assessment (SEDA) report. The aim of SEDA is to present the insight on countries’ development beyond pure economy and to get insights into well-being and reveals that countries can make the overall welfare of citizens the top priority while promoting sustainable and robust economic growth.

Here it can be pointed out that Poland is the 1st country worldwide in terms of improving the highest number of SEDA indicators and the 2nd country in European Union with the highest SEDA score improvement. And, over the last decade, the country improved in most dimensions - most notably in infrastructure, employment, environment and income. Add to that it performs better in the dimensions of economic stability and education.

The October 4 investor summit in New York was a special event devoted to the outlook for Polish business that was organized by PZU at the Harvard Club New York, with the opening speech by the Prime Minister of Poland. As well as the CEOs from Poland's biggest companies, around twenty funds from the U.S. focused on investing in Poland attended the event as well as BNP Paribas.

Follow Roger, an ex-FT writer who has penned various investment stories, on Twitter @AitkenRL, LinkedIn, Forbes, Google+. He won a State Street Institutional Press award in 2015.

I am a freelance financial journalist based in London and former FT staff writer covering stock exchanges and transaction services. In recent years I have written for a number of trade titles like Futures & Options World (FOW), magazines such as the FT’s Investors Chron...